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With fewer first buyers taking out home loans than a decade ago12, one might have concerns for the future of the Great Australian Dream.

While affordability is squeezing high-demand capitals, such as Sydney and Melbourne, interest rates remain at record lows, continuing to give astute first-time buyers opportunities to purchase their piece of the property pie.

Just because you can’t afford what or where you want to buy first up, doesn’t mean you should forego property altogether. The longer you leave getting into the market, the harder it may become. Property prices may increase beyond your reach or the cost of living in general may climb, making it harder to save for a deposit.

While you may not be able to afford your dream home now, you can still take steps to help you afford it in the future.

Be prepared to compromise

While location remains the main mantra when it comes to property, many buyers may have to compromise on where they stake their first claim.

Rather than honing in on houses, consider an apartment, or even older units, which often have bigger floorplans and greater scope for renovating and redecorating.

If scoping inner-city or even middle-ring suburbs, set your sights on outer suburbs with greater affordability. You may have to commute further if you work in a CBD, and it may take longer to get to the beach on a hot summer’s day, but living on the urban edge can have lifestyle advantages.

  • You can escape quicker for a tree change, with many outer suburbs bordering bushland or national parks.
  • Amenities and infrastructure, such as shopping centres and hospitals, are often newer on the city fringe.
  • Your area is likely to be full of other first-home buyers, which often include young couples and young families, bringing energy and a greater sense of community to a neighbourhood.

Buying in newer, outer suburbs also means newer houses or apartments, which usually means fewer maintenance and repair costs, and more contemporary building materials, décor and landscaping.

You may find that once you are in the market and have paid down some of your first mortgage, you are in a stronger financial position to revisit your original desired location.

Make a move

It’s a bold idea – and certainly not for everyone – but is the quest for your first property an opportunity to live in a totally new city or region?

Apparently around one in three of us was prepared to pack up and move interstate to improve our financial lot in 2012, if the ING DIRECT Financial Wellbeing Index of that year was anything to go by3.

The reality is around 300,000 to 350,000 Australians move interstate each year4, according to the latest available data from the Australian Bureau of Statistics. While many may move for family or work reasons, first home buyers looking for more affordable digs could also be part of this migration.

Before you call the removalists consider:

  • Financial security – can you secure employment before you make the move?
  • Lifestyle – what local hobbies, amenities and attractions will help you have a fulfilling personal life?
  • Family – if you have a partner and/or kids, will they be happy in the new location?

On the flipside, relocating to a new state, city or town is a potentially exciting opportunity to experience new people and places, and pocket some savings along the way.

Become a rent-investor

There’s no rule that says you have to live in your first property. Many first home buyers are challenging convention by rent-investing – renting where they want to live and buying an investment property in a more affordable location.

The objective for these renters is to buy where they can afford to get a foothold on the property ladder. That could be another suburb in the same city or a town in an entirely different state.

As with any investment, the key is to choose a property on financial merit, not emotion. Are you looking for capital gain over time or high rental yields right away?

The investment property can be positively geared, where the rent exceeds the cost of the mortgage and upkeep to give you a profit, or negatively geared, where the rental income is less than the cost of owning and managing the property, creating a tax deduction.

Seek legal and financial advice so you are well informed about how renting and taking on an investment property impacts your finances and tax obligations.

Maximise incentives

Various grants and stamp duty concessions are offered in each state and territory to give first home buyers a leg up. As at February 2017, here’s a snapshot of what’s available and where, do bear in mind that things could change, so double check before you commit.
For more information, visit www.firsthome.gov.au

New South Wales  

First Home Owner Grant (new homes)

  • Amount: $10,000.
  • Eligibility: New homes valued at $750,000 or less.

Stamp duty help for first home buyers

  • No duty on new homes valued up to $550,000 and vacant land valued up to $350,000.
  • A duty concession on new homes valued between $550,000 and $650,000, and vacant land valued between $350,000 and $450,000.

  Australian Capital Territory  

First Home Owner Grant

  • Amount: $7,000.
  • Eligibility: New or substantially renovated properties valued at $750,000 or less.

Stamp duty help for first home buyers

  • Just $20 in stamp duty is payable on new or substantially renovated homes up to $468,000, with a sliding scale to $590,000.
  • Gross income thresholds apply and increase according to how many children you have.

  Queensland  

First Home Owners’ Grant

  • Amount: $20,000 until June 30.
  • Eligibility: New homes valued at $750,000 or less.

Stamp duty help for first home buyers

  • The First Home Concession offers significant stamp duty discounts for first homes valued up to $550,000.
  • First home buyers purchasing a home valued at more than $550,000 can apply for
    a stamp duty concession through a second scheme called the Home Concession scheme.

  Western Australia  

First Home Owner Grant

  • Amount: $15,000 until December 31.
  • Eligibility: New homes valued up to $750,000 if south of the 26th parallel (metropolitan Perth and south) or up to $1 million if north of the 26th parallel.

Stamp duty help for first home buyers

  • First home buyers are exempt from paying duty on homes worth $430,000 or less. A sliding scale for concessions applies to homes valued $431,000 to $530,000.

  Victoria  

First Home Owner Grant

  • Amount: $10,000.
  • Eligibility: New homes valued at $750,000 or less (total land and home).

Stamp duty help for first home buyers

  • A 50 per cent reduction on duty for new or established property in Victoria valued from $130,000 to $600,000.
  • Further duty discounts may apply if first home buyers are buying off the plan.

  South Australia  

First Home Owner Grant

  • Amount: $15,000.
  • Eligibility: New homes valued at $575,000 or less.

Stamp duty help for first home buyers

  • Concessions of up to $21,330 apply to new or substantially refurbished apartments purchased before June 30.

  Tasmania  

First Home Owner Grant

  • Amount: $20,000 until June 30 and $10,000 from July 1.
  • Eligibility: New homes – no threshold.
  • No stamp duty help for first home buyers.

  Northern Territory  

First Home Owner Grant

  • Amount: $26,000.
  • Eligibility: New homes – no threshold.

Stamp duty help for first home buyers

  • Up to $23,928.60 in stamp duty relief is available for first home buyers purchasing an established home valued up to $650,000.
  • First Home Owner Grant recipients can also apply for the Household Goods Grant Scheme worth $2,000.

1 www.abs.gov.au/ausstats/abs@.nsf/mf/5609.0
2 www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/5609.0Main+Features1Oct%202006
3 www.news.com.au/finance/money/australians-prepared-to-move-interstate-for-financial-and-lifestyle-gains-report-finds/news-story/9ddec50b97ed612515990e31e83a9bb5
4 Australian Bureau of Statistics, Net Interstate Migration, 2014-15 and 2013-14
http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/3412.0Main%20Features62014-15

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Hanging out

Tidy up with these super-sized, powdercoated paper clips that are a functional, yet witty design piece. Attach a set to the wall for hanging of bags, coats, hats and backpacks. Australian designed and made, they’re also really reasonably priced for an item that hits the balance between form and function.

www.bendo.com.au

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Fresh as a daisy

Fill this feisty little lady with baking soda, pop her in your fridge and the soda’s deodorising properties will neutralise any lurking nasty fridge smells.

www.davisandwaddell.com.au

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Prepare for launch!

This jetpack backpack will ignite a little person’s imagination while equipping them for every important mission. Pack the backpack for day care, kindergarten or school and prepare to launch into orbit – the sky really is the limit!

www.suck.uk.com

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Switching home loans could help pay down your mortgage sooner, providing you are refinancing for the right reasons and understand what’s involved. Here’s our guide to refinancing to help you make the right move when the time comes.

Know the costs

Paying 0.5 per cent less per annum on a $250,000 principal-and-interest mortgage could save you around $23,000 over the life of a 25-year loan. That’s a sizeable chunk of change back in your pocket over the long term, but there are usually up-front costs associated with switching loans, especially if moving to a new lender.

Know the costs of exiting your current mortgage loan before switching. Depending on the type of variable rate loan you have, the lender may apply fees if you choose to bow out. If you are on a fixed rate loan, a cost will usually apply when paid ahead of the agreed timeframe.

You should also factor in any set-up costs for your new loan, which can be several hundred dollars, and any ongoing account fees.

Only once you have factored in all of the associated costs will you be able to assess whether you gain financially by refinancing, and that’s where we can help you make the right decision.

Compare products and service

A lower interest rate is a great reason to switch but it shouldn’t be the only deciding factor. Make sure the new loan is flexible enough to meet your needs and help you get ahead as quickly as possible. Some benefits to consider:

  • Can you make fortnightly repayments? You could pay off your loan quicker making payments every two weeks instead of monthly.
  • Can you make lump sum payments? Any extra repayments above and beyond your regular schedule will shave dollars and time off your loan.
  • Does the new loan offer a redraw facility? It’s great to stash extra cash in your mortgage to pay it down quicker but if you think you may need it back at some point, make sure your new loan lets you access those excess funds.
  • To fix or not to fix? We’re still enjoying low interest rates on the back of the historic lows the Reserve Bank of Australia cash rate is at, but make sure with any change you consider you have some wriggle room for if rates do rise. Make sure you’re future–proofing at every turn.
  • What features are important to you and think about the ones you could do without. Why pay for the bells and whistles attached to a loan if you don’t use them? Different features when it comes to technology, service and availability rank differently for everyone, so figure out what’s important to you and we’ll help you match it with the right product and the right lender.
  • Working with us to sharpen the pencil. Just one of the benefits of having us on side when it comes to your finance is our ability to work with the right lenders on the right price when it comes to things like your rate and your ongoing fees.

Switch to save

Many borrowers refinance to consolidate debts, bundling credit card balances, personal loans or car payments into their mortgage, which usually carries a much lower interest rate. The benefit is lower minimum payments on your debts overall, which can be a benefit for cash flow. But that doesn’t mean you are saving on your home loan. Try to make the most of the lower rate to knock down the total debt quicker so you are not simply adding to the duration of your mortgage. And make sure you cancel any credit cards once you have transferred the balances into your mortgage so you are not tempted to rack up more debt.

Direct your debits

If you switch to a new loan, make sure you also switch any direct payments and debits. It’s easy to lose track of what’s being paid, and how and when. Run through the most recent three months of statements for your original loan to identify any direct payments, and notify the biller as soon as possible so you don’t jeopardise your credit rating. You should also give your employer your new account details if your wages are paid directly into your mortgage.

Check your borrowing power

One of the biggest oversights borrowers can make when shopping for the right home loan deal is their current financial situation. Has it changed since you took out your original loan? If the answer is yes, and it’s not for the better, you may find your borrowing power has shrunk, which could limit your refinancing options.

You may have: started a family and no longer have two full-time incomes; switched careers and now earn less; started your own business, creating a less regular income stream; accumulated other debt, such as credit cards or car finance; or eroded your credit rating through late payments. Any of these factors can impact your borrowing credentials, and may give you fewer bargaining chips than when you took out your original loan.

Do a thorough assessment of your total income, expenses, outstanding debts and credit rating so you understand your true financial position before shopping around.

Talk to your broker

Take the time and stress out of shopping for a new loan by letting us as your mortgage broker handle it for you. We have access to multiple lenders with multiple products, allowing us to cast a wider net than you probably can on your own to find a home loan deal that suits your needs and circumstances. Brokers can also often gain access to lenders who are happy to take on self-employed borrowers, or those who don’t advertise heavily to consumers, but still offer competitive home loans. The benefits of having us onside are numerous; and the reason that now more than 52 per cent of Australian borrowers use a mortgage broker to arrange their finance.

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Australia’s National Treasure and undoubtedly one of our most distinguished thinkers, Dame Edna Everage is as entertaining on the page as she is on stage. Take a comedic romp across our nation as Barry Humphries’ alter ego provides a masterly history of 101 quintessential Australian things: from our world-class sharks and marauding possums, our game-changing inventions like the dualflush loo and Hills Hoist, to barbies, eskies, goon, O Words, The Ashes, pink lamingtons, Bex powders, bogans, thongs, uggs and utes – you’ll be amazed at what our sunburnt country has contributed to modern civilisation.

Harper Collins RRP $29.99

haven-food

Oatmeal Bread
Makes 2 loaves

Ingredients:
1 cup rolled oats
½ cup wholemeal flour
2 tablespoons dark brown sugar
2 tablespoons honey
4 teaspoons salt
2 tablespoons unsalted butter
2 ½ cups boiling water
¾ teaspoon instant yeast
4 ½ cups plain white flour

In large mixing bowl, combine oats, wholemeal flour, brown sugar, honey, salt and butter. Pour boiling water over the mixture, stir to incorporate and melt butter. Set aside to cool (in the fridge if you’re in a hurry).

When batter is cooled to lukewarm (not over 32°C), add yeast and plain white flour. Incorporate fully by stirring with wooden spoon, or in mixer on lowest speed. Note: dough should be able to be formed into a ball, a bit tacky, but no longer excessively sticky. If very sticky, add a little more plain flour.

When the dough can be formed into a ball, turn onto a lightly-floured surface and knead by hand 8-10 minutes (or 8 minutes on low in mixer). Place in a greased bowl, cover and let rise in a warm spot for one hour. Gently deflate the dough (by softly punching down) and let rise again for another hour.

Preheat oven to 180°C.

On lightly-floured surface, divide dough in half. Shape each piece by folding the edges in towards the centre to create a package. Turn over so the seam side is down. Brush the top with water and sprinkle with extra oats.

Place in two greased loaf pans and let rise for another hour. With a serrated knife, cut 3-4 diagonal slits across the top. Place in oven and bake for 30-40 minutes or until the crust is golden brown. Remove from pans and cool on wire rack.

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Congratulations to Kelly for winning our summer edition competition when we put the call out for your best Sleeveface.

Sleeveface is the internet phenomenon that’s garnered thousands of clever contributions the world over, with people using record cover sleeves to create an optical illusion by augmenting a part of their body. With one’s imagination the only limit, the ideas people come up with are nothing short of inspired. Check out some of the best examples at the Sleeveface website www.sleeveface.com

Kelly’s nicely positioned Grace Jones entry has won her $1,000. Thanks to everyone that gave this competition a go.

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Mention interior designers and most people think glossy magazines, luxe fit-outs and big bucks. But interior designers are not necessarily expensive, and the right advice from the right style guru could add some panache and pizzazz to your décor for fewer dollars than you think. It’s as much about knowing who to use as it is about knowing how to use and when to use an interior designer.

When building

An interior designer can help inject your personal style and personality into your new home. If building a custom or architect-designed home, an interior designer will help connect your carefully crafted exterior with what’s within. Your architect and designer may even work hand in hand to ensure there’s continuity throughout. It’s about creating spaces you enjoy but also those that function efficiently.

Inviting a designer to work on a new home is like presenting a painter with a blank canvas. But don’t wait until your house is complete to introduce your designer. Bring them into the project while it’s under construction to help choose materials for critical design features, such as the kitchen, bathrooms and floors.

Even if building a project home, with limited choices of features and materials, you can make the most of a designer to stamp your own style. Find a designer who is willing to work for just a few hours at an agreed rate to provide advice on colour, art choices and soft furnishings.

Avoid incorporating too many fads into permanent fittings and fixtures. Tastes, trends and technology change so limit bold statements to furniture and décor you can switch out easily.


When renovating

Before you knock down walls or put up new ones, invest in a visit from an interior designer for sound advice and fresh thinking. A good designer will listen to your brief but overlay it with their experience and insights, which means they can see around the corners you can’t, helping you maximise design opportunities and avoid costly mistakes. Your designer can also project manage some aspects of the renovation for you, which is handy if you work full-time. Costs vary but add at least 10 per cent to your renovation budget for this service.

Show your designer any special items you wish to display, such as a painting or a collection, to ensure your remodel will accommodate them. Interior designers focus on the big picture but also bring an eye for detail to ensure your renovation reflects you, your interests and your lifestyle.

One of the biggest benefits of using an interior designer is their ability to act as a renovation referee, ensuring the project caters to both his and her needs and encouraging compromise where required.


When selling

This is when designer tastes can really pay off. A well-staged home can help seal the deal sooner and potentially fetch bigger bucks than if you styled it yourself.

Staging can cost thousands, especially if you hire furniture and art (which can be worth it), but a designer can also help you show your house in its best light on a budget.

One of the first priorities is to declutter. A designer is likely to be more ruthless and less emotional about what to display, and will know how to make rooms appear as light and bright as possible.

Ask your designer to advise on paint, window dressings and soft furnishings, all of which can be easy and inexpensive to change before your house goes on the market.

How to work on a budget with an interior designer

  • Find a designer who is willing to work for an hourly rate and be specific about how you wish to use their time. You might, for example, ask them to come up with design ideas on the proviso you put the effort into bringing them to life.
  • Share your decorating budget with the designer so they select furnishings, fixtures and fabrics you can afford.
  • Ask your designer to develop a mood board with colours and materials so you can create the look yourself.
  • If your budget is super skinny, engage a designer just to scope your colours. You can get expert advice on the right paint palette for as little as $150 an hour.
  • Find images in magazines and online to explain what you do and don’t like.

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Email fail

It’s estimated that 205 billion emails are sent globally each day. With such mega numbers flying around, we’ve probably all been there – the horror of accidentally hitting reply all or sending an email to the wrong person. We want to hear about your most cringeworthy email fail. Whether it’s the ultimate career limiting move in a workplace, or an awkward email sent to the wrong person – tell us your tale to be in the running to win $1,000.

How: email your story in 250 words or less to havencompetitions@afgonline.com.au placing ‘My email tale’ in the subject line.

Include: your name, address, email, phone number and the name of your mortgage broker.

Dates: opens on February 17 and closes on April 12.

Winner: will be decided on April 13 and notified by telephone after this time.

Terms and conditions: email havencompetitions@afgonline.com.au to request terms and conditions.

WHAT YOU NEED TO KNOW

Any advice contained in this newsletter is of a general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regard to those matters. Information in this edition is correct as of the date of publication and is subject to change.

Need to talk finances?

Whatever your circumstances, we will find the deal that’s right for you, not the lender. Send through a quick enquiry and we will be in touch.